Export-Import Business Advantages and Disadvantages

Export and import business are a great business idea to start as they allow you to be involved in trading goods to and fro from foreign countries and India tapping into global economic trading. However, you see the phrase export-import constitutes two different words and doesn’t mean the same.

Exporting goods or services is mainly sending out products from your home country to a foreign nation while importing means purchasing the goods or services from a foreign country and bringing it to your home nation. A person can be involved in either of these two or can conduct both the business as part of his work where you export certain products and also import certain products.


We here will take the liberty to discuss both aspects and shed light on the ways of invigorating the export and import business and its impending advantages and disadvantages.

Advantages of Export-Income Business

Starting an export-import business comes with a great set of benefits that spells betterment for a business owner. We’ll discuss the aspects of the good in this particular segment before taking on the cons in the later segment. Let’s find out:

1. Opportunity

Export import business allows for a great opportunity for a business owner. Talking about exports mainly, the opportunity to sell your products globally across various nations brings about lots of deals and foreign currency. It also helps to maximize profits as certain products fetch better prices abroad than in the home nation. As for the import part, various products can cost a lot or cannot be manufactured in the home nation. During these times, importing such products can help you bring in new products from other nations and sell them as a distributor or final product.

2. Maximized value of products

Export business allows for a better payout and greater share of profits in comparison to selling it domestically. Various products have a better value for money in the international market as the consumers are there. This helps a business owner to export these products abroad and generate better revenues. As for imports, as aforementioned, some of the products when manufactured domestically can cost high margins and reduce profits. At these times, importing them can reduce the cost of the product and give you the maximum margin of profit possible.

Also Read: How To Start Export Business In India

3. Government Bonus and Incentives

Every home government in the nation promotes the exporting of goods and services as that can build international trade relations and help to bring in foreign currency boosting the nation’s foreign reserve and GDP as a whole. For importing, the government normally discourages imports to a large extent, but there are certain initiatives and incentives for the import of technology and other goods that are provided.

4. Reduction of production cost and technology

Despite many nations boasting of superior technology, many products are native to certain countries because they can be manufactured there at a fraction of the cost of other nations. The major example can be all the tech companies outsourcing manufacturing to China and India as the production costs are less in these nations. Exporting business for such tech and products often helps to reduce the cost of products. Similarly for imports, bringing in these products from other countries rather than manufacturing in the home country can help to reduce costs. In the end, business owners can market it better and generate better returns.

5. Global Recognition

Export-import business helps a lot in building global recognition and empowers people. Whether it is exporting or importing specifically, there are various bilateral or multilateral relations made help expand the horizon of the business and economics as a whole. This brings more opportunities to expand the business add more product lines and create a diversified or expanded business portfolio.

Disadvantages of Export-Import Business

The export-import business also has some hard facts that come up in terms of being a disadvantage and affecting the business owner. We here take a look at these:

1. Government intervention

Since export-import business relies on global relations and the economic terms between the nations, it can be affected by government intervention or any new law in effect. This has been the case for many business owners. Certain products which are incentivized for export may be removed or certain products can get banned in terms of import. This all of a sudden can cause havoc for business owners and affect their plans.

2. Foreign exchange rate fluctuations

It’s pretty clear that the export-import business is dealt between two or more nations and the deals are generally done in widely accepted foreign currency. Since forex tends to be affected by market fluctuations business deals can become cumbersome in terms of cost and margin of profits. A sudden change in the rates can certainly hit the profits by a lot and not make such a deal feasible at the time.

Also See: Forex Trading Mistakes To Avoid: Lessons From The Pros

3. Political tension

Again a given fact that this can be an imminent threat to the export-import business. The change of laws or government intervention is on one side, but deterioration of the political ties between nations can disrupt the business to a great extent. Political ties and diplomatic relations between nations can change on a flip of the coin and business owners relying on import export can suffer. For say, two friendly nations start having political tension and close economic ties, this is a disaster for business owners.

4. Shift in the consumer mentality

It doesn’t take long for the consumer mindset to change. This holds for both export and import businesses. Certain goods that are exported to the foreign nation may not be anymore consumable as the customer’s consumption pattern has shifted and such deals won’t fetch any good revenue. Similarly, for imports, you may import certain goods for trading or selling, but if the customer has moved on from that product and wants a newer product, then the deal makes no sense in economic terms.

Final words

Export-import business has been part of our trade and business for centuries and still holds to much extent. As the world is globally tied with economic deals and partnerships, such businesses are a necessity and you can tap into this need of time with your initiative. We advise you to address both sides of the coin before venturing to become an astute business owner

Related Topics
Jewellery Business Advantages And Disadvantages Restaurant Business Advantages And Disadvantages
Furniture Business Advantages And Disadvantages Bakery Business Advantages And Disadvantages
B2B Business Advantages And Disadvantages Car Wash Business Advantages And Disadvantages
P2P Business Advantages And Disadvantages Clothing Business Advantages And Disadvantages


Sumit Kumar Yadav has experience analyzing business and finance of big to small companies. Loan, Insurance, Investment data analysis are his key areas.